CEFC will still be scrapped despite making money

Scrapping the Clean Energy Finance Corporation will cost the federal government $439.2 million over four years, the budget update reveals.

During the election campaign, the Coalition claimed it would save $760 million by scrapping the CEFC as part of its pledge to revoke the carbon tax package and related measures.

But Treasury says the CEFC is on track to make $43.9 million in 2014-15, $131.3 million in 2015-16 and $263.9 million by 2016-17.

The Coalition has consistently claimed the CEFC, a $10 billion loan facility for clean energy projects, would lose money and be an expensive failure by issuing bad loans.

Treasurer Joe Hockey on Tuesday brushed off suggestions the gov­ernment should reconsider closing the CEFC. “The cost of funds are in the budget. So the CEFC funding is not free, it’s banked in the budget.
Photo: Andrew Meares

Chairman
Jillian Broadbent
appealed last month for the government to reconsider the decision, saying the corporation was making money for taxpayers and would account for up to 50 per cent of Australia’s emissions reductions by 2020.

Ms Broadbent told the inquiry the CEFC had loaned out $536 million, which had been matched by more than $1.5 billion in private investments.

But Treasurer
Joe Hockey
on Tuesday brushed off suggestions the gov­ernment should reconsider. “The cost of funds are in the budget. So the CEFC funding is not free, it’s banked in the budget. The CEFC is a stand-alone entity lending out money," he said.

“Well, maybe it does make money. But they don’t have to account for the $10 billion that goes into it in the first place and the cost of those funds, which are all borrowed; and our view is we shouldn’t be borrowing money to lend money and that’s exactly what’s happened with the CEFC."